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Friedman’s Follies
The columnist's math falls flat in Detroit.


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Henry Payne

Detroit – Surely the most frustrating columnist in America today is the New York Times’ Thomas Friedman. Widely praised for his rational, clear-eyed explanation of global markets in the best-selling The World is Flat, he is fast undermining that reputation with his irrational, self-righteous crusade against the American automobile.

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Earlier this summer, Friedman embarrassed himself badly in Detroit by making the sweeping, ignorant assertion that no company is “more dangerous to America’s future” than struggling General Motors because its marketing of sport-utility vehicles (SUVs) perpetuates America’s “addiction to oil.” By contrast, Friedman’s May 31 column maintained GM’s arch-rival Toyota is rolling in green because it has gone Green with its innovative hybrid vehicles.

The broadside ignored all the lessons of market economics that Friedman had so carefully explained in “The World is Flat,” provoking this irony-tinged tongue-lashing from Csaba Csere, editor of Car & Driver magazine: “What Friedman doesn’t grasp is that in market-driven societies, customers control what they buy, not corporations.”

As Csere — and every auto analyst — knows, Toyota is making billions in the U.S. market precisely because it has adapted remarkably well to the American consumer’s taste for well-made SUVs. And for Toyota, margins on trucks exceed those on cars by some seven times.

Csere continues:

Friedman seems to think that Toyota’s relative success has been fueled by a diet of small, efficient machines. But the statistics tell a different story. Trucks were only 26.7 percent of…vehicles sold by Toyota in 1995. By 2005, Toyota had more than doubled its sales to 2,260,296 vehicles, and of this much larger total, trucks had increased to 43 percent.
Not content with that lesson, Friedman has dug himself another hole in his Times column this week.

Climbing into his moral pulpit to condemn Vice President Cheney’s criticism of Democrats gone soft on the War on Terror, Friedman first took a page from Arianna Huffington’s far-left rantings by asserting that U.S. consumers subsidize terrorism by driving gas-powered cars.

Wading into the subject of fuel-mileage standards, he got in completely over his head.

“Mr. Cheney, if we’re in a titanic struggle with Islamic fascists, why have you and President Bush resisted any serious effort to get Americans to conserve energy?” he sermonized. “Why do you refuse to push higher mileage standards for U.S. automakers or a gasoline tax that would curb our imports of oil?”

One false premise at a time, please.

First, with respect to CAFÉ (or Corporate Average Fuel Economy standards) — which mandates an average fuel-economy number across the car and truck fleets of automakers — the regulation has had the exact opposite effect of its charter.’

CAFÉ was designed in response to the oil shocks of the 1970s. It was supposed to reduce oil consumption by raising mileage standards, first to 18 mpg in 1978 (17 for trucks), and then to 27.5 mpg (20.5 for trucks) in 1987. Already on the rise before CAFÉ due to relentless advances in engine technology, average fuel economy peaked at 22.1 mpg in 1987 — then slid somewhat to 21 mpg as of last year.

Why? Because CAFÉ didn’t anticipate the massive consumer switch to light trucks (in part due to CAFÉ’s forced downsizing of cars, while the market still demanded larger vehicles).

Contrary to federal estimates that CAFÉ would force a 30-percent decline in oil consumption, “energy consumption increased by about 30 percent between 1978 and 2000,” according to Paul Joskow, an MIT economist. Rather than reduce America’s dependence on foreign oil, CAFÉ has presided over a period when imported oil has risen from 35 percent of the U.S. market in 1974 to more than 52 percent today.

How did the feds get this so wrong? They estimated that “vehicle miles traveled would increase by 38 percent by 2000. In fact, miles traveled increased by 150 percent,” writes Joskow. He attributes this to more efficient vehicles overall, as well as more trucks, cheap gas, and an increase in vehicles per capita as Americans have become ever richer.

As transportation became more affordable, drivers did more of it — driving “twice as many miles as they did before CAFÉ was enacted,” says H. Sterling Burnett of the National Center for Policy Analysis.

Friedman, the alleged market expert, is blissfully unaware of this basic market math. Instead of acknowledging the failure of CAFÉ, he calls for more of the same.

As for his gasoline-tax idea, it is a political non-starter. Even a candidate as green as John Kerry fled from a 50 cent gas-tax proposal when he ran for president in 2004. But the idea that the gas tax reduces foreign oil dependence is unproven.

“I’m not a car expert,” Friedman admitted in one of his pro-Toyota columns. At least on that fact, he’s got it right.

Henry Payne is a freelance writer in Detroit, and editorial cartoonist for the Detroit News.



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